Unit trust

Unit Trust

Unit trust.

The category of investment known as a mutual fund in the United States is called a unit trust in other parts of the world.

unit trust

a financial institution which specializes in investment in FINANCIAL SECURITIES on behalf of its ‘unit’ holders. Some unit trusts offer a single fund, but more usually they operate a number of funds catering for different investment requirements. Unit trusts pool together the monies of a large number of investors which they use to purchase a varied portfolio of investments, mainly UK and overseas corporate stocks and shares and government fixed-interest securities. They are ideal for smaller investors who wish to secure a wider spread of risk than they could achieve for themselves by direct investment in a limited number of securities, or who require professional management of their investments.

Unit trusts issue ‘units’ in their funds to buyers, and repurchase units from sellers on the basis of a bid price (lower, for buying) and an offer price (higher, for selling). An initial management charge is required of buyers, followed by a smaller annual charge. The value of the individual units in a fund is obtained by dividing the total value of the fund investments plus cash held, by the number of units in existence every day. A fund which is growing will need to create new units, while one in decline will liquidate units on redemption. The value of the total investments of a fund is determined by the value of the securities it holds and the fund's valuation, and hence unit prices can go up or down with the ebb and flow of STOCK MARKET prices in general. Unit trusts usually offer investors a variety of funds to choose from, ranging from general funds which aim at a balance between current income and capital growth, to those specialized in achieving either capital growth or high current income.

unit trust

a financial institution that specializes in investment in FINANCIAL SECURITIES on behalf of its unit holders. Some unit trusts offer a single ‘fund’, but more usually they operate a number of funds catering for different investment requirements (for example, high income, capital growth). Unit trusts pool together the monies of a large number of investors which they use to purchase a varied portfolio of investments, mainly UK and overseas corporate stocks and shares and government fixed-interest securities. They are ideal for smaller investors who wish to secure a wider spread of risk than they could achieve for themselves by direct investment in a limited number of securities, or who require professional management of their investments.

Unit trusts issue ‘units’ in their funds to buyers and repurchase units from sellers on the basis of a ‘bid’ price (lower, for buying) and an ‘offer’ price (higher, for selling). An initial management charge is required of buyers, followed by a smaller annual charge. The value of the individual units in a fund is obtained by dividing the total value of the fund investments plus cash held by the number of units in existence every day.

The list of unit trust funds offered under the EPF MIS is evaluated yearly based on the criteria established by the EPF and approved by the Ministry of Finance Malaysia, added EPF deputy CEO (Investment) Datuk Mohamad Nasir Ab Latif.

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